FG to sell four refineries next year
The country's four refineries with a combined capacity of 445,000 barrel-a-day will be put on sale in 2014, according to the Minister of Petroleum Resources, Diezani Alison-Madueke.
Alison-Madueke announced plans by the federal government to privatize the refineries in an interview with Bloomberg TV Africa in London.
'We would like to see major infrastructural entities such as refineries moving out of government hands into the private sector. Government does not want to be in the business of running major infrastructure entities and we haven't done a very good job at it over all these years,' she said.
A presidential audit of the facilities last year recommended their sale due to inadequate government funding and 'sub-optimal performance.'
The refineries, which have a combined 445,000 barrel-a-day capacity, should be privatised within 18 months, according to the report submitted to President Goodluck Jonathan in November 2012.
Nigeria, a member of the Organisation of Petroleum Exporting Countries (OPEC), produced 1.99 million barrels a day of crude in October according to data compiled by Bloomberg.
While Nigeria is also Africa's top crude exporter and the most populous with more than 160 million people, it relies on fuel imports to meet more than 70 per cent of its needs. Its state-owned plants operate at a fraction of their capacity because of poor maintenance and aging equipment.
The country exchanges 60,000 barrels a day of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage's refinery in Ivory Coast, according to Nigeria National Petroleum Corporation (NNPC).
'We are right now undergoing a major turnaround maintenance programme' of the refineries, Alison-Madueke said.
Improvements on the two-unit 210,000 barrel-a-day Port Harcourt refinery, the country's biggest, will be completed by the end of the year, to be followed by enhancements at the Warri and Kaduna sites in 2014, according to the NNPC. Warri has a daily processing capacity of 125,000 and Kaduna 110,000 barrels.
Meanwhile, a report by Citigroup Incorporated said the OPEC may have to reduce crude output next year amid increasing supply from producers outside the group including the U.S., Canada, Kazakhstan and Brazil.
Citigroup in a commodities report yesterday said '2014 looks like a year in which the OPEC will have to cut. Non-OPEC supply growth looks robust and demand growth remains underwhelming.'
Non-OPEC supply is expected to grow 1.7 million barrels a day in 2014, led by North American production, it said. The startup of Kazakhstan's Kashagan field should contribute 100,000 barrels a day to non-OPEC output next year, while new oil projects should come on stream in Brazil. Demand for supply from the group, or so-called call on OPEC crude, could drop to 29 million barrels a day next year, the bank said. This would be a 1.11 million fall from the 2013 level.
OPEC, which set a collective production target of 30 million barrels a day in December 2011, will next meet to review targets on Dec. 4 in Vienna.
Members of the group, which supplies about 40 percent of the world's oil, are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.